Americans Expect Children To Be Worse Off Financially Than Their Parents

On Wednesday night, President Trump delivered a prime-time address focused on affordability and what he has done, and hopes to do, to address it. The speech comes as underlying economic concerns have grown severe, with Americans now overwhelmingly believing that parents are better off financially than their children will be.

A recent Economist/YouGov poll asked this question directly: “When children today in the U.S. grow up, do you think they will be better off or worse off financially than their parents?” Only 14% thought children would be better off, 18% said they would be about the same as their parents, and 51% said they would be worse off.

This sentiment persists despite some commonly cited economic metrics appearing relatively healthy. Unemployment stands at 4.6%, which is concerning because it has steadily increased since late 2023, but it remains within a historically normal range. Inflation is also nearing the Federal Reserve’s 2% target, measured by the Consumer Price Index at 2.7% year over year in November.

Even so, these indicators have not eased Americans’ economic anxiety. Inflation remains Trump’s weakest issue, with a -27.1 net approval rating. On the economy more broadly, he faces a -13.5 net approval rating.

However, even if Trump were somehow able to “fix” the economy before the midterms by lowering inflation and unemployment, concerns about the long-term financial prospects of the next generation would not be resolved by short-term improvements.

One indicator of the economy’s trajectory is GDP growth and its correlation with the stock market. Since 2000, the stock market has risen by roughly 8% per year on average when dividends are reinvested, and inflation-adjusted GDP has increased by about 71%.

Over the same period, inflation-adjusted median wages rose by just 12.6%.

This disparity would matter less if most Americans had significant exposure to the stock market. According to the Economist poll, only 40% said they or their spouse had money invested in the stock market through individual stocks or mutual funds. Among that 40%, some 40% reported having less than $50,000 invested, 12.5% had $50,000 to $100,000 invested, 20% had $100,000 to $500,000 invested, and 12.5% had more than $500,000 invested.

As a result, for 76% of Americans, including the 60% with no stock market investments and the 16% with less than $50,000 invested, the most impactful economic metric affecting their lives is wage growth. That growth has averaged less than 0.5% per year over the last 25 years, leaving household earnings effectively stuck in place despite decades of economic expansion.

Another fundamental factor shaping whether children will be better off than their parents is housing affordability. Between 1965 and 2000, home prices averaged between 3.6 and 4.6 times U.S. median household income. In the early 2000s, prices climbed to about 7 times median income before falling to roughly 5 times during the 2010s. During the pandemic, prices rose again to about 7 times the median income and have remained near that level.

This trend has significantly increased the average age of first-time homebuyers. In 1991, the average age of a first-time homebuyer was 28. By 2025, it had risen to 40, according to the National Association of Realtors.

Americans have been feeling these rising costs even over the past year. According to the Economist poll, 49% said housing costs, including mortgage payments and rent, have increased a lot over the last year, and another 24% said they have increased a little.

Growing housing unaffordability harms households in two key ways. Historically, homeownership has served as a hedge against inflation, as rents rise over time while mortgage payments remain fixed. Homes have also functioned as the primary investment vehicle for most American households. As homeownership declines and renting increases, the financial gains from rising home values are increasingly concentrated among a smaller group of individuals and companies that own rental properties.

Taken together, these factors explain why overall wealth in the United States continues to grow while the benefits accrue to a narrower segment of the population. Although these problems have developed over decades and cannot be reversed within a single four-year term, ensuring that future generations are as financially secure as their parents will require more than just economic growth; it will require policies that ensure those gains are broadly shared by working- and middle-class Americans.